Shell, Petronas Finalize Deal on Iraqi Oil Field
Shell and Petronas aim to increase Majnoon’s oil production by more than 1 million barrels per day. (image: news.sky.com)
BBC News reported that on Sunday, oil leviathan Royal Dutch Shell and Malaysia’s state run oil company, Petronas, finalized a contract to develop Iraq’s 12.6 billion barrel Majnoon oil field. The deal includes a 20-year service contract and the companies will receive $1.39 per barrel of oil. Shell owns 60 percent of the venture and Petronas owns the remaining 40 percent.
The agreement was signed at Iraq’s oil ministry in the presence of Iraqi oil Minister Hussain al-Shahristani and Mounir Bouaziz, an executive at Shell.
This joint venture is the latest in a line of deals for Iraqi oil, and is part of Iraq’s plan to increase its oil production and make it one of the world’s largest oil producers. To revive its oil industry, which has been affected by years of sanctions and war, Iraq needs the assistance and expertise of foreign oil companies.
The size of Iraq’s known oil reserves ranks only behind those of Saudi Arabia and Iran. At about 2.4 million barrels, Iraq’s daily output is relatively small for a country with as much known oil reserves. However, the country aims to triple its output over the next several years.
Shell and Petronas have pledged to increase the Majnoon oil field’s output to 1.8 million barrels per day from just 46,000 barrels per day.
